South Korean shipbuilding conglomerate Hyundai Heavy Industries (HHI) is undergoing a tax probe launched amid speculations on the shipbuilder’s involvement in illegal overseas fund transactions.
The investigation is likely to spread toward the shipbuilder’s affiliates. Hyundai Heavy has 26 affiliates in shipbuilding, heavy machinery, and the plant and energy businesses.
According to HHI, the investigation is part of regular tax audit activities taking place every five years. HHI was last probed in 2010.
However, the National Tax Services (NTS) is reported to be looking at the possible irregularities aside to regular investigation.
“We have found many problems in Hyundai Heavy Industries’ overseas fund transactions during a preliminary investigation,” the Korea Herald cited an NTS official as saying. “Additionally, we have spotted substantial amounts of illegal inside trades amongst affiliates.”
Auditors from Seoul and Busan regional tax offices began scrutinizing records at the company’s headquarters in Ulsan, as informed on Wednsday.
HHI posted nearly 50% less in new orders in the first two months of 2015 compared to the same period last year.
The shipbuilding conglomerate has resorted to restructuring measures that saw lay-offs and closing of unprofitable business branches, such as those engaged in renewables, so as to steer back to profit.
World Maritime News Staff